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Home My WebLink About97-60 . . 4. Resolution No. 97-60 RESOLUTION AUTHORIZING RENEWAL OF GROUP HEALTH INSURANCE WITH TRUSTMARK INSURANCE COMPANY BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN, ILLINOIS, that Robert O. Malm, Interim City Manager, be and is hereby authorized and directed to renew the City' s stop loss (excess coverage) for its group health insurance with Trustmark Insurance Company pursuant to the summary of the Trustmark Insurance Company renewal proposal, a copy of which is attached hereto and made a part hereof by reference. s/ Kevin Kelly Kevin Kelly, Mayor Presented: February 26 , 1997 Adopted: February 26 , 1997 Omnibus Vote: Yeas 6 Nays 0 Attest: s/ Dolonna Mecum Dolonna Mecum, City Clerk (Attachment #1) City of Elgin . ....Quotes Secured --- -- - ._ Revised - —- --- - -- 81 Singles 464 Total • Life and AD&D Volume$15,451,000 • Aggregate Aggregate Premium Premium PPOIPrecert• Admin . Total Max Life/AD&D Annual • Company Specific _ Factors Attach Specific 'Aggregate: Premium Fees ;Fixed Costs: Cost ; Rate Life Prem Trustmark-Pres $23.41 $432.21 $1.80 $930,344 $90,024 $3.05 $8.00- $201,944j $2,608,449i$.23/1000 $42,648 15112$100,000 • $23.41. $432.21 $2,406,505 $16,982 $44,598 i Trustmark-Re - • $24.81 $432.21 $1.80 $138,144• $.10,020 $3.05 $8.00 $209,7441-.- $2,616,249:$2311000 $42,648 15/12 $100,000 $24.81 $43221* $2,406,505 - --- $16,982' $44,598^ F(OF F< ` 412./1' City of Elgin Agenda Item No. �RaIf D FF-� February 6 , 1997 TO: Mayor and Members of the City Council FROM: Robert O. Malm, Interim City Manager SUBJECT: Group Health Insurance Renewal PURPOSE The purpose of this memorandum is to provide the Mayor and Members of the City Council with information to consider renewal of the City' s Health Maintenance Organization (HMO) and Self Insurance Plans . BACKGROUND rft. The City has two group health insurance plan options avail- able for all full-time employees . A fully self insured indemnity plan and an HMO plan through HMO Illinois (Blue Cross Blue Shield) . Specific and Aggregate Insurance are provided for the Self Insurance plan by Trustmark Insurance Company. Bid specifications were sent out by our broker, Robert L. Schmidtke and Associates, to seventeen carriers for the stop-loss (excess insurance) coverage and to six HMO provid- ers . After reviewing submitted quotes (attachment 1) , it was recommended that it will be in the City' s best interest to renew with our current carriers for the 1997/98 year. A letter (attachment 2) from Blue Cross/Blue Shield indicating that they can not compete with our current rate for excess coverage and administrative cost is attached for your informa- tion. Our overall premium increase for the HMO plan will be 5% and the Specific Stop Loss renewal increase will be 5 . 9% . The increase in the specific premium is due to the fact that we had a claim that exceeded our $100, 000 specific attachment point and four that were over 50% of the attachment point in 1996/97 . Administration and Preferred Provider Organization cost will remain the same as in 1996/97 . COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED None. FINANCIAL IMPACT HMO Illinois rate will increase 5% from: 1996/97 to 1997/98 Difference Single $149 . 24 $156 . 70 $ 7 . 46 Family 396 . 73 416 .57 19 . 84 Total Annual $660,089 $693,093 $ 33,004 Self Insured Plan Changes will be as follows with the only change being in the Specific Stop Loss Premium: 1996/97 to 1997/98 Difference Administration $ 44,598 $ 44,598 0 Preferred Provider Organization 16,982 16,982 0 Aggregate Stop Loss Premium 10,020 10, 020 0 Specific Stop Loss Premium 130, 344 138, 144 7, 800 Total Fixed Cost $ 201,944 $ 209,744 $ 7,800 Sufficient funds have been budgeted in the Medical Insurance Fund (#635-0000-796-05-04 HMO and #635-0000-796-53-08 Health) 47)to cover anticipated insurance expenses . LEGAL IMPACT None. ALTERNATIVES None. RECOMMENDATION it is recommended that the City renew its HMO Plan with HMO Illinois and our excess coverage with Trustmark Insurance Company. Respectfully submitted, Olufemi ' •'lari Re- :urces irector 1✓r f► •o•ert •.. Malm In erim City Manager OF/vls elk ROBERT L. SCHMITKE & ASSOCIATES 175 Olde Half Day Road Lincolnshire, Illinois 60069 (847) 634-2480 January 2, 1997 (847) 634-1869 Fax Mr. Olufcmi Folarin Human Resources Director City of Elgin 150 Dexter Court Elgin,II. 60120 Re:Renewal Stop Loss/HMO Dear Femi: • Stop Loss Renewal Based on competitive bidding,Trustmark Insurance Company represented the lowest maximum cost of those carriers solicited for bids. Trustmarks renewal represents an increase in maximum annual cost of less than 1%over the prior year. Based on these facts we would recommend accepting the Trustmark renewal. • HMO Renewal Based on competitive bidding, HMO Illinois(Blue Cross)represented the lowest cost of HMO's solicited for bids. The final rates represented an increase of 5%. Therefore we would recommend accepting their renewal at this time. Please let me know if you wish to discuss these recommendations further. Sincerely, QC� Robert L. Schmitke RLS/ms kZ Employee Benefit Specialists (Attachment #1) City of Elgin __ Quotes Secured ------ ____ _._ . .__. . ___. --- - -- 'Revised - — --- - - -- 81 Singles 363 Family . : ........ 464 Total • Life and AD&D Volume$15,451,000 • Aggregate Aggregate • Premium Premium PPOfPrecert Admin . Total Max 'Life/ADM) Annual Company • Specific • Factors Attach Specific 'Aggregate: Premium Fees ;Fixed Costs- Cost :- Rate Life Prem Trustmark-Pres ----$23.41;- $432.21•_ - $1.80 30 34 $1 , 4 $10,020 $3.05 $8.00: $201, 0 00 9441 $2,608,4491$.2311 $42,646 15112$100,000 $23.41: $432.21 $2,406,505 • $16,982 $44,598• Trustmark-Ren • $24.81 $432.21 $1.80 $138,144 $10,020 $3.05 $8.00 $209,7441 $2,616,249:$2311000 $42,648• 15112 $100.000 $24.81 $43221 $2,406,505 - . $16,982: $44,598 061 Life ••------- $18.23 $501.40- $2:601$141,7861 -$15,007 $3.051 $8700: $218,293; $3,010,088 No Quote- - - 15/12$100,000----• - $27.40 _.$501_40- $2,791,7951 • .------ ----- •- - $10,982] $44,598 . .. . .. ------_.. _.. —,... . - ._-- .... ... .._ ---• . Pan Am . - ^.. $26.24 $242.82 $3.42 $261,786 $19,740 $3.05: $8.00'_- $343,106 •$3,270,958._• • .No Quote 15112$100,000 $51.41, $585.69 $2,927,8521 __.. - $16,982: $44,598. • Trans General $9.921 $223.82 $2.911 $122,700: $16,2001 $3.05 $8.00; $200,4801 $2,989,727;$25!1000 $46,350 15112$100,000 $24.60 $559.55, $2,789,247! --- - ' $16,982 $44,598 - Boston Mutual I $22.50 $456,251 $1.79 $125,2801 $9,967• $3.05' $8.001 $196,838' $2,737,238'$27!1000 $50,064 15112$100,000 $22.50 $456.25 $2,540,4001 1 • $16,9821 $44,598r --•-- Mutual of Omaha; $31.691 $470.001 $2.871$176,448: $15,984; $3.051 - $8.001 $254,0121 $2,870,972 $2511000 $46,356 15112$100,000 $31.691 $470.001 $2,616,960 j $16,9021 544,5981 ! INA , $27.21 $486.911 _ $151,505 $13,3631 $3.05 $8.001 $221,448 $3,030,527 No Quote 15112$100,000 ' $2721 f $486.91 $2,808,079 $16,982 $44,5381 1 Ca/lade Life $23.41 $258.27 $1.62' $130,320: $9,0211 $3.05 $8.00' $200,921' $3,055,19fi $.23!1000 $42,648 15/12 $100,000 23 41 $566.37 $2,854,875j I 1 $16,9021 $44,598 I • y J J 1 age 1 of 1 Blue Crofts li ueShieki Au Inde entlrnt Licensee of the `a J of Illinois Blue Crtm and(Ulu•Shield.4•..s elation (Attachment #2) 1415 wet122t d Slrrvl (Ads amok,lttie,ais 00121-41220 Tekph ine.030-5M -0500 FAX 030-5A4-0000 /emery 16, 1997 Bob Scbmidtke Robert Schnudtke&Associates 175 Old Half Day Road Lincolnshire. Illinois 60469 RE: City of Elgin Dear Bob: After a thorough review by our underwriters of your proposal request for the City of Elgin,we regrettably will be unable to provide you with a proposal. Our intention was to provide you with a PPO program representing 100%in-network and 80%out-of-network hospital benefit levels. The resulting underwriting analysis was an uncompetitive proposal as compared to their current aggregate claims liability, specific and aggregate premiums and administrative costs. We certainly appreciate your submission of the proposal request to us. Additionally,we appreciate the opportunity to continue to provide HMO coverage to the employees of the City of Elgin. If you have any questions,please contact Ernesto Aguilar orruyscclf in • - - ‘101101.1 Fig r Steven ' . Accoun imager I k ett1,Care sir,,,,•Corporidinit x Mtana,1,eittl Antre-te Compa,► (131 r 1;KA..ADO Milt. 5h1CIA of ttt"iuui:) - ROBERT L. SCHMITKE & ASSOCIATES 175 Olde Half Day Road Lincolnshire, Illinois 60069 (847) 634-2480 January 2, 1997 (847) 634-1869 Fax Mr. Olufcmi Polarin Human Resources Director City of Elgin 150 Dexter Court Elgin,TI. 60120 Re: Renewal Stop Loss/HMO Dear Femi: • Stop Loss Renewal Based on competitive bidding,'I'rustmark Insurance Company represented the lowest maximum cost of those carriers solicited for bids. Trustmarks renewal represents an increase in maximum annual cost of less than 1%over the prior year. Based an these facts we would recommend accepting the Trustmark renewal. • HMO Renewal 41) Based on competitive bidding, HMO Illinois(Blue Cross) represented the lowest cost of H MO's solicited for bids. The final rates represented an increase of 5%. Therefore we would recommend accepting their renewal at this time. Please let me know if you wish to discuss these recommendations further. Sincerely, Robert L. Schmitkc RLS/ms Employee Benefit Specialists